Debt Ceiling vs 14th A

I've been trying to find out more abut the debt ceiling, and found this Interesting article that I will try to summarize as succinctly as possible, so as not to lose the reader's attention:
https://www.cato.org/blog/debt-ceiling-unconstitutional-what-about-default#:~:text=Accordingly, a debt ceiling is,funding is not statutorily barred.

The 14th A clearly states that public debt shall not be questioned. Which, to any of us means, we just need to pay it. Period! The debt ceiling would appear to contradict that by basically "forbidding" default.

The relevant Court case in this matter is Perry (1935). According to this resolution, any debt authorized by Congress MUST be payed. But debt ceiling advocates argue that this means the budget. That even though Congress approves appropriations above the budget, incurring in debt to pay for them is not authorized unless they increase the debt ceiling. A weird concept indeed.

But here's the thing: according to Perry, it would be unconstitutional to repudiate the debt. Repudiating, unlike defaulting, is equivalent to saying that the debt does not exist. But defaulting is not repudiating the debt so long as there is the understanding that we will pay at a later time. Like if you owe your bank for your credit card, and you don't make your monthly payment. You're not saying that you don't HAVE the debt (which, under Perry, would be unconstitutional if the government did this)... just that you'll be paying at some indeterminate point in the future, Which triggers interests and penalties but does not infringe on Perry when it's the government that does it.

Of course, the counter to this would be that when Congress appropriates funds that were not in the budget, this implicitly authorizes the executive branch to incur in debt.

So long as the government takes steps to pay the debt, they are not repudiating it. But then Congress would have to approve more taxes, or selling Treasury securities, or gold.... If they don't, then they WOULD be repudiating the debt. And that would be unconstitutional. The executive branch would then be free to incur in more debt, and the debt ceiling would be effectively eliminated.

However, in the impasse, the effects on the markets, for example, would be devastating. And this is the main reason why BUSINESSES would not want this to get to this stage.

This is how I understand it. Corrections are welcome...

 

Hitting the Debt Ceiling =/= Default.

First, there is no reason to hit the debt ceiling the House has already passed a bill that raises the debt ceiling by $1.5T. The Dems in the Senate have proven unable to pass anything else, in the end, they'll likely pass the House bill and send it to Biden for his signature and he'll sign it. If he refuses, Dems will have to look long and hard at over-riding his veto.

But, back to your scenario where Biden is actually able to force a debt ceiling strike that results in reduced Government operation, keep in mind that 'shutdown' is not actually what occurs, the government continues to function, using incoming receipts which are formidable, and with non-essentials furloughed.

The federal government currently averages about $406B a month incoming receipts, far more than enough to make monthly debt service payments, several times over.



Now if Illegitimate and Heavily Internationally Bribed Joe REFUSES to service the debt with incoming receipts, then I think the House should promptly impeach him for violating the 14th amendment and the Senate should remove him from office. And if Kackles does the same, remove her as well, and Speaker McCarthy, who would then become President, would promptly service the debt through incoming receipts.

All hitting the debt ceiling means, is that the government has to live with the very formidable means we generously supply them. The equally generous House has given Biden and the Dems an off ramp, with a big bump in the debt ceiling in exchange for a slight, but not insignificant, nudging of the Federal Government back within the means that the self-sacrificing American People provide for the Federal Government.

Let's hope that Sneaky Schumer and Bribed Joe are smart enough not to get really stupid here. I personally doubt that Secty Yellen would obey Biden's unconstitutional order to refuse to service the debt.

 

No! They passed a joke by which they would increase the debt ceiling ONLY if Biden undoes all the progress he has achieved during his two and a half years in the Presidency.

But that's irrelevant (topic for a different thread). The points of this thread are...

1-.. that it might be a good idea to default on the debt (I don't know for sure, but it's worth considering). It will definitely shock the market, and have some negative consequences in businesses. But it will be short-lived And it will STOP the practice of politicizing the debt that Republicans keep adding to with wasteful spending and tax welfare for billionaires. But, having said that...

2-... it will not happen. Because it's bad for the donor class.

Best solution: just get rid of the debt ceiling altogether and stop playing this idiotic game.

 

I love to see politicians arguing economic policies that are truly over their heads. Guess what - the American economy functions best when pols looking for votes keep their hands off.

 

I can't remember where I read this, but there's a bill that became law somewhere that says that if the government reaches the debt ceiling then automatic cuts take place across all government agencies. So the situation has already been planned for.

 

You’re a bit late, but yes. Exactly. http://www.politicalforum.com/index.php?threads/the-debt-“ceiling”-is-unconstitutional.610252/

 

True. But politicians need to create emergency situations like this so they can solve them and get your vote. It's always about getting stupid people to vote for them. Most of them would barely qualify as a fast food branch night managers.

 

Hard to tell if your misunderstanding and mischaracterization of the situation is rooted entirely in your partisanship or if plain ignorance is a contributing factor. But let’s start with this: the President doesn’t get to pick and choose what he spends the money on. Congress directs what he can spend in authorizations and appropriations acts. All deficit and debt problems are Congress’s fault, and if we default it will be Congress’s fault, too.

 

No. The sequestration cuts built into the budgets of 2011–2013 triggered some spending cuts through around 2030, but it does not stop us from spending more than the revenue we’re generating. So at some point, the Treasury’s bank account reaches zero (because Congress authorized too much spending and/or too little taxes) and people stop getting social security checks, or the military stops getting paid, or debt payments don’t go out, or maybe all of that happens.

 

Fake News. They passed a solution that will require that the Federal Government moves a bit closer to living within our means, just like all of us have had to do after the 25 straight months of the real wage declines in the Biden/Dem Red Ink Orgy Inflation disaster. The Clean House bill is the only bill that has passed a House in Congress, as such, it's the only game in town until the disorganized Dems can manage to pass something, and many doubt that they can pass anything, at the moment.

You posted it.

It's not. If Biden gives the UNCONSTITUTIONAL order to Yellen to refuse to service the debt, I expect that she will refuse and resign. If she obeys, the House should immediately impeach her.

The small reductions can be offset by reducing wasteful spending, and if Dems actually want to raise taxes on Billionaires, then they already should have while they controlled both Houses of Congress and the Presidency, but they didn't, and no such bill has passed the Senate, so, you are essentially diverting the discussion, again.

That's not happening.

Tell it to Biden and the Disorganized Dems, we're not ones demanding an unlimited credit card paid for by the working folks who make far less than the DC connected crowd.

Biden goes into the budget negotiations mindless screaming 'NO! NO! NO!' as his approval is crashing and his decades of selling his office to the highest bidder, including potential enemies of the United States become more and more impossible to deny.

New ‘Astonishing’ Info Released on Biden Family Corruption

'We have now established a network of over 20 companies formed by the Bidens and their associates. Most of these companies were LLCs and formed when Joe Biden was Vice President.'

'The Bidens received over $1 million for the Romania deal, with 16 of the 17 payments made during Biden’s VP term. The money stops flowing from Romania soon after Joe Biden leaves office, establishing a pattern of influence peddling.'

Don't think that Biden's collapse isn't going to affect these negotiations. Voters favor the House approach over the Biden approach and over the shutdown that you favor.

It's time for the Senate to pass the Clean House plan and send it to Biden for his signature, and go back to the business of improving the Nation for the American People.

 

Our "means" are enormous. The right wants to STOP us from living within our means. They think it would be to their political advantage to live as if we were an underdeveloped nation.

In any case, that has nothing to do with the debt ceiling. The fact that you think the debt ceiling means limiting spending shows us that you're not actually aware of what is happening here. Holding the debt ceiling hostage to force Biden to undo all the progress he has made is not going to work. Because, as the OP shows, it would hurt the donor class, to whom Republicans owe the seats they hold in Congress. So it's just not going to happen.

 

If the debt ceiling keeps getting raised, that means the debt isn't being paid.

If the debt were being paid, there would be no need to raise the debt ceiling.

 

The debt will never be paid. It's impossible.

Woodrow Wilson sold The People's U.S. Bank to the Federal reserve bank in 1913.

What Wilson did was to borrow $100 or whatever from the Federal Reserve Bank with the promise to pay back $100 and $10 interest. So the federal reserve bank prints up $100 worth of notes. But, they just printed up $100. There is not $110 in existence, so Woodrow needs to get another loan for $100. The federal reserve prints it up, gives to Wilson, and now Wilson owes $220. But there is only $200 in existence.

It's a self perpetuating system of destruction, and it's been going on for over a century. We can't pay the debt off and the spending must increase yearly or we default. All we can do is prepare for the inevitably defunct USD.

 

Uhm.... I think you should stick to topics you are familiar with. There's a forum about videogames where you would likely excel.

 

Thank you for agreeing...lol

 

It allowed us to win two world wars, become the richest nation and the most powerful democracy in the world with the most powerful military in human history, as well as one of the world's main intellectual, artistic and scientific leaders... I like that kind of inevitability.

 

Yeah?

Well maybe you should go long on t-bills.

 

You know what the largest denomination bank note ever put into circulation is?

Zimbabwe issued a one-hundred-trillion Zimbabwe dollar note back in 2008. In 2012 the U.S. froze the hundred-trillion note at a value of $0.40 USD.

All fiat currencies eventually go defunct. The USD is fiat currency.

So you just hold onto those paper dollars Golem. They will always be worth something- if you need to take a crap.

 

Not impossible. It could, theoretically, be paid off if tax revenues covered the money we spent each year, including debt service, for enough years. However, you would only want to do that if our economy were contracting, which could happen if we get less and less productive and/or decrease in population.

 

No, you are incorrect. One cannot pay back a $200 loan with interest if all the money in the world is $200. It is quite literally impossible.

 

What the Constitution means to anybody will not get anywhere convincingly in the SCOTUS. The Constitution does not say the debt shall be paid even though that is what it means to you.. On the other hand the Perry law, which is likely constitutional, does make it a law for the government to pay its debts, but not with more debt.

 

You assume the only thing that’s worth $200 is two hundred dollars of currency, but that does not reflect reality.

 

Well sure, you can always sell yourself and your kids into slavery.

Don't think for a second that that is not on the table...

 

Or your property. Or the goods you produce from your property. Or your business. But if you’re really so limited in thought and economic understanding then go on thinking we have to sell ourselves into slavery to pay off the national debt.

 

You simply do not know how the USD works. I already explained it once. If you need me to explain it again come back tommorow.